BME 30 Escaño, Georizz Kristine

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BME 30 International Business and Trade

“The global business environment is REALLY CHANGING!”
BME 30 Escaño, Georizz Kristine
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Kk
BME 30 Escaño, Georizz Kristine
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Chapter 1: The Rise of Globalization

Globalization: Shrinking Time and Space
Globalization
 It is the socioeconomic reform process of eliminating trade, investment, cultural,
information technology, and political barriers across countries.
 socioeconomic perspective: binago niya on how we deal with other people and
how we conduct business
 barriers of trade: because of globalization na-eliminate tong mga to
 COVID-19: unti-unti ba muling umuusbong ang mga barriers of trade? (lockdown
and stop international flights)
 It can lead to increases economic growth and geopolitical integration and
interdependence among nations of the world.
 bawat regions are forming coalition or alliances
 Regional Integration – Example: ASEAN – para mapa-strengthen yung
geopolitical (politics + boundary/territories) na nag-ooperate within those
countries
 It is the time na ba na papayagan nating mag-join ang ibang bansa sa ASEAN? –
Example: China – matagal na niyang nililigawan ang ASEAN, pero sabi ng
ASEAN countries baa ma-bully lang tayo
 It is no longer simply another word for “Westernization” or “Americanization.”
 Westernization – gaano nga ba yung impact of western cultures sa mga countries
most especially in Asia
 Nowadays: Asian Culture is already garnering the world (parts of Western
countries lie America) – they welcome K-pop culture
 China products ay talamak na rin worldwide – Project Made in China – infiltrate
yung bawat countries (Sinosization)
 Kawaii (Cute) Culture in Japan – Example: Pokemon
“Hindi lang Americans ngayon ang nasa center stage, nariyan na rin ang Korea, Japan,
China (Asians).”
 Leads to the creation of global culture readily available in the Global Cultural
Supermarket (Gordion Matthews)
 DIY (Do it Yourself) Culture – kahit nasa bahay ka lang, once you browse the
internet marami ka ng culture na nalalaman/naaadopt/naiinculturate – global na
yung culture mo
Globalization starts:
 Industrial Revolution: nung time na nainvent na ang steam engine
 Other Text Book: it started when nag-boom ang internet – nagaroon ng
Information Technology
 regardless of the definition, it definitely shrinks time and space
 before it will tae us months/years para marating ang isang lugar (Galleon Trade),
but through globalization (internet) in just one click and span of minutes
mavivisualize mo na yung gusto mong makita at puntahan
 most transactions nowadays are done online
Emerging Economies
 are implementing more open trade and free-market policies to “compete with everyone
from everywhere for everything”
 Yes nag-ooccupy pa rin ang United States, United Kingdom, European countries
sa world of economy – sila pa rin yung dominant countries
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 However, during the turn of the century, mayroon na tayong tinatawag na

“Emerging Economies” – nagkakaroon sila ng activities that are boosting their
economies aya naiilala na rin sila worldwide
 are becoming the world’s center of economic gravity through innovation, research, and
development
 may activities sila that boosts their economies kaya nakikilala sila worldwide
Example of Emerging Economy: BRICS Economies
 Brazil, Russia, India, China, South Africa (2010 – enters)
 countries na maganda yung pamamalakad ng government kaya nagboboom yung
kanilang economy
 India – isa sa mga countries na may Delta variant aya question rin ung paano sila nag-
susurvive ngayon – isa sila sa producers ng cellphone
Asian Tigers – Hong Kong, Singapore, Taiwan, and South Korea – mga Asian countries na nag-
boboom ang economy
Pacific Pumas – countries in Latin America na nagboboom ang economy (Columbia, Chile,
Peru, and Mexico)
Latin America – most of their countries ay naaaramdam ng corruption (very poor) kasi hindi
stable yung government nila – however, there are countries na ahit papaano ay namamanage pa
nila yung anilang economy (Pacific Pumas)
Tiger Cub (baby tiger) – Philippines with Malaysia, Taiwan, Vietnam, and Indonesia – they are
newly industrializing countries (paboom)
Sick man of Asia – because of COVID-19 baka maging ganito ulit tayo (Philippines)

Decoupling and the Move to a Multipolar World Economic Order

Decoupling – breaking apart
 A global shift in which industrialized country dependent developing economies grow
based on their own underlying economic strengths rather than those of highly-developed
countries
 this is the phenomenon na yung mga emerging countries are no longer dependent sa mga
matagal ng developed countries
 These industrialized countries already gained internal strengths and confidence na ahit
hindi sila tulungan ng mga old industrialized countries ay mapapaboom pa rin nila yung
anilang economies – DECOUPLING
 Because of this decoupling nagkaroon ng MULTIPOLAR WORLD
 Naging strength nila through:
1) They try to diversify their export outlets/markets
2) They focus on their competitive advantage (anong meron ka na makaka-pagsave ng
time and effort)
 Strategies: currency (float) – they anchor their currency depende sa kung ano
yung dictate ng currency ibang countries
 Exchange or International Float
3) They focus on domestic market
 Focus on Domestic Markets – para ma-improve yung human capital:
improve or focus ka muna sa tao mo – maibigay yung needs ng mga tao mo
 Economic Development – Important Aspects: human capital, education,
health, resources
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 Thinking ng Government: dapat yung tao niya muna bago yung ibang tao –
pero dapat balance kasi kailangan mo rin mag-export (diversify the countries
na nacoconduct ka ng export)
4) Do not over-indulge – avoid living in credits
 yung mga countries na hindi masyadong umaasa sa credit card yung mga
magdadive as an emerging countries
 Japan and Canada – these are countries na unlike US (may pinaka-mataas na
credit score – they introduce credit card system)
 Great Depression – credit card system starts
5) Strengthen your banks – banks are hearts of the economy: kasi kapag hindi namanage
properly
 Dati bipolar lang: sa western ang sikat is US, while sa Asian is Japan – ngayon marami ng
polar ang nag-usbungan
Multipolar World
 A world economy in which the engines of growth are comprised of both industrialized
(e.g., the United States) and emerging market economies (e.g., BRICS countries)

Banko Sentral ng Pilipinas – by law: independent body – pero kahit papaano may control pa
rin ang government

A Multipolar World Economic Order

Key International Institutions That Facilitate Globalization

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Key International Institutions

 they facilitate ng International Monetary System
 after World War II, nung malapit ng matapos ang World War II nabuo ang Bretton
Woods
Bretton Woods
 this gave way to the creation of these three main international institutions – sila yung
nagmamaintain ng ating monetary system
 International Monetary Fund, World Trade Organization (GATT before), and World
Bank: these three organizations maintain the equilibrium in the economy

The International Monetary Fund

 International Monetary Fund’s role in global financial
stability:
 Provides a forum for cooperation on international
monetary problems
 Facilitates international trade that promotes job
creation, economic growth, and poverty reduction.
 Promotes exchange rate stability and an open
system of international payments
 Lends countries foreign exchange to help address
balance of payments problems

The World Bank

 World Bank’s initial role was to aid the
reconstruction of Europe after World War II.
 Current focus areas:
 Global integration through trade
liberalization
 Analysis and national trading policy
advice
 Agreements supporting international
standards in financial systems
 Information and knowledge transfer to developing countries to support
sustainable development
 Eradicating communicable diseases
World Bank
 created for restructuring – because during the World War II maraming nasirang structures
 aided the reconstruction after World War II
 also helps to combat COVID-19 pandemic

The World Trade Organization

 The WTO began trading in 1948 under the General
Agreement on Tariffs and Trade (GATT).
 Liberalized trade by lowering and/or removing
trade barriers such as tariffs, quotas, and
subsidies.
 WTO promotes global trade by:
 Administering trade agreements
 Acting as a forum for trade negotiations
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 Settling trade disputes

 Reviewing national trade policies
 Providing developing countries with technical assistance and training programs
 Cooperating with the IMF and the World Bank
WTO – all about trade and its regulations

Institutional Structure and its Impact on Globalization

 What is institutional structure?
 Institutions are the rules, enforcement mechanism, and organizations that support
market transactions.
 Impact of globalization:
 Demand for transparency, openness, and disclosure from political institutions
- they should be transparent so that people can be aware of what they are
doing
- checks and balances
- Blue Ribbon Committee and Ombudsman – checks government
activities and anomalies
 Need for adaptive institutions that provide societal stability and incentives for
private investments
- gaano nga ba asupportive yung mga institutions natin, especially the
government
- Government: nagbibigay ba sila ng incentives for private institutions or
investments
- kailangan pa rin dapat na may watcher ang government (checks and
balances), kasi if walang nagbabantay sakanya gagawin niya kung anong
gusto niya
- Example: Create Law: nagbibigay ba siya ng incentives sa mga
corporations?
 isa ito sa mga paraan para makita that the government is
adaptive
 dahil greatly affected ang majority of businesses, this was
proposed para makabawi yung businesses financially
 nagaroon ng Create Law as a response sa crisis (COVID-19) na
pinagdadaanan natin

 Increasing expectations of accountability and responsibility for those who govern

- it’s the system of full disclosure – nadidisclose natin or open tayo
- this combats corruption
- if you have the sense of accountability, you will never corrupt kasi alam
mo na masama yun, and because you are the government – you are
mandated to maintain the welfare of the people and not your own personal
interest
- you need to be accountable for your responsibility and anything na
ginagawa mo
 Importance of independent judiciary and free press
- kailangan natin ng isang independent judiciary (free press)
- judicial system: siya ang nagsasabi kung legal or illegal bay un
- free press: watchdog – sila yung nagbabantay ng everyday activities ng
government and other private entities – they serve as watchdos sa ating
mga civilians, private or public people
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“Once institutional structure ang pinag-uusapan, institutional government na agad ang nasa
isip, pero malaki rin yung impact ng social media, mass media, and religions as institutions.”
Government
 usaping business and trade, government lagi ang pumapasok – because they are the
regulator of business and trade
 it breaks and makes the business dealing
 if super strict ang government – marami siyang regulations na ipinapatupad, to the point
na imomonopolize niya na lang yung certain product
 essential institution that really affects globalization: and at the same time globalization
affects government too

Effective Policy Measures That Promote Globalization

Effective Policy Measures:

a. Good Governance
b. Competitive Markets
 marami tayong mga laws on how to foster competitiveness
 RA 10667 or Philippine Competition Law – nag-iincentivise rin ng mga
corporations na maging competitive enough (if they could be national champions
and later on become international champions). Because these are the corporations
that could do the exporting.
 Government: they are legislating laws para mamotivate yung mga private
investors and corporations para magboom yung ating economy
 Anti-Trust Laws (Anti-Monopolist Law) – they prevent/avoid monopoly (they
see benefit just for them, capitalist)
c. Property Rights
d. Anti-corruption Policies

 These are the suggestions of Gaspar et al on how to establish an effective policy measure
that could promote globalization
 Promote Globalization? – Example: Latin America – most of the countries don’t have a
stable government. Thus, as a country na nag-iinvest (an emerging economy), do you
want to invest on those countries that have bad governance? Definitely NOT. Hindi ka
pupunta sa countries that lacks judiciary system – hindi competitive ang market kasi it’s a
lose situation.
 So, in order to promote globalization and business and trade or maging win-win situation,
you need to have these policies
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Impact of Information Technology on Globalization

I. The Digital Generation
 Information Technology – in just a snap of a
finger yung nararamdaman ng iba,
nararamdaman mo na rin
 In relation to business and trade or in
globalization: because of the globalization and
heightened by the internet – by information
technology, yung revolution na pinagdadaanan
natin ngayon is very instantaneous, tuloy-tuloy
siya walang interruptions – ngayon because
tuloy-tuloy yung pagdating ng information
technology palower ng palower yung cost
 OLD: cellphone is a luxurious good – kapag
may cellphone a branded as mayaman
 NOW: cellphone is a necessity – brand na ang basehan ng estado mo sa buhay
 Ngayon, because of the demand of technology kahit hindi kaya is inaafford na kayanin
kasi we need them – hindi magsusurvive ng online class ung wala tayong gadgets
ngayon

II. Expanding the Global Use of Information Technology

 kasi afford na ang mga technology ngayon, nag-eexpand na rin yung global use natin –
meaning to say, yung cellphone is hindi nalang pantext and pantawag
 kahit ayaw mong ishare yung culture mo, basta may mga tao that will serve as catalyst
mapapalaganap
Global Cultural Supermarket
 isa sa mga hindi maiiwasang impacts ng technology
 because of technology/globalization, ahit ayaw mong ishare yung culture mo as long as
may mga tao that would act as catalyst – change maker or innovators will be inevitable
para yung culture mo is mashare globally
Traditionalist/Purist
 ito yung grupo ng taong ayaw nilang mabahiran ng foreign culture yung anilang culture
 gusto nilang mamaintain yung purity ng culture na meron sila

III.The Digital Divide Myth

 there is growing digital divide
 Gaspar et al: No its just a myth, yung tinatawag niyong digital divide ay myth lamang –
hindi totoo – because more and more people have access to technologies nowadays
 expanding use and cost-friendly na ang technologies ngayon – Gaspar et al: mas naiilian
na yung digital divide
 However, if we will explore other places lalo na sa far plunk areas (mahirap ang internet
connection) – there still exist yung digital divide
 Older Generations – marami pa rin sakanila ang hindi marunong mag-access ng
technology
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 Digital Divide Myth: this is a debatable concern for many political analyst and
economies (Gaspar et al)
 Ignorance – result of laziness to learn – nagiging victim ng fake news when you fail to
learn
 As learning individuals, we need to verify, and have self-investigation if totoo ba ang
isang bagay or hindi
 Digital Divide also exist between those who have and have not resources

IV. “Leapfrogging” into the Internet and Cell Phone Era

 Leapfrogging – product of globalization
 Change or innovation is a process (may pinagdadaanang process, steps, or phases). Thus,
when a country tries to leapfrog hindi na niya pinagdaanan yung preparatory or
preliminary stages
 most of the emerging countries are leapfrogging – instead of Level 1, Level 3 na sila
 Stage Skipping – taking short-cuts – nag-iskip ng stage (yung mga countries mas nag-
iinvest sila sa wireless communication rather than line communication)
 Path Creating – you are creating a new path – because of leapfrogging nakaisip ka ng
paraan para idivert yung path mo and hindi ka sumunod sa mga ginagawa ng mga
industrialized countries
 Example of Path Creating: Mobile/Online Banking (in cellphones) – we
created/innovated path (skipping a stage) – these are happenings brought by globalization
(information technology)

The Globalization Controversy

 Arguments against globalization:
a. Job losses and income stagnation
 Victims: are those countries that could not keep up
 there are countries that hire overseas workers – Example: Silicon Valley –
Indian Workers (mas mura ang salary and magagaling sila compare sa
American worers). May negative impact sa locals kasi sila naman ang
magkakaroon ng income stagnation (mawawalan ng trabaho)
 So, dapat imaintain pa rin ng country na yung human capital niya are
competitive enough doon sa country na yun and in other countries

b. Loss of local control over economic policies and developments

 if the government is not strong enough and madali siyang ma-influence ng
other countries, there is a possibility na mawalan siya ng control over its local
economy – nagaaroon ng political manipulation ng other country
 if the government is not strong enough other countries or foreign government
could control/exploit your people and resources

c. Disappearance of old industries

 those industries that could not keep up with the demand/impacts of
globalization closes
 Example: Pandemic – small business closed or even those big businesses na
hindi nakapag-formulate ng plan on how to cope up with the pandemic
d. Related erosion of communities
 because of globalization yung natural/local culture natin ay nababahiran na ng
foreign culture
 Cultural Schizophrenia – masyado na nating inembrace yung foreign culture,
nakalimutan na natin yung local culture and products natin – we are separated
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na culturally sa ating country that’s why nagkakaroon ng local erosion (instead

of supporting local products, we don’t support it anymore, because we tend to
see our local products as inferior compare to foreign products)
“Globalization creates (im)possibilities.”